The US economy created 379,000 jobs in February, pointing to a sharp rebound in the American labour market amid a rapid decline in coronavirus cases nationwide and reigniting a sell-off in US treasuries.
The increase in employment last month was more than double its pace in January, when the economy created 166,000 jobs after shedding 306,000 positions during the pandemic’s winter surge in December.
The leisure and hospitality sector recorded an increase of 355,000 jobs, which accounted for the bulk of last month’s gains
However, it still leaves the world’s largest economy 9.5 million jobs short of its pre-pandemic levels. The US unemployment rate edged down to 6.2 per cent.
Bond sell-off
A sell-off in US government debt accelerated after the jobs report was released on Friday. The yield on 10-year treasury bonds climbed 0.05 percentage points at one point to 1.62 per cent – its highest since February 2020 – extending losses that racked up on Thursday after Federal Reserve chairman Jay Powell failed to quell concerns about the rise in yields in recent weeks.
Treasuries came under extreme pressure last week, as investors positioned for higher inflation and the potential for the Fed to tighten its ultra-easy monetary policy earlier than expected.
Many economists have recently upgraded their outlook for growth in 2021 on expectations of a swift vaccination rollout and the implementation of president Joe Biden’s $1.9 trillion stimulus plan.
The labour market is one of the weakest spots of the US recovery after millions of service-sector jobs were shed during the pandemic.
After the dramatic hit suffered in March and April of last year, Americans went back to work in large numbers over the summer, but that progress stalled over the winter months.
Lay-offs
February’s job creation was not sufficient to make up for 523,000 net lay-offs during the previous two months.
While the manufacturing sector created 21,000 jobs, construction lost 61,000 positions as unusually cold weather hit many parts of the country. Government also lost 86,000 jobs over the course of last month.
But economists said the overall figures pointed to further improvements in the coming months.
“You are getting the first benefit of some states loosening up a little bit,” said Stanley. “February is really just a downpayment on what should be much larger gains in the subsequent quarters.” – Copyright The Financial Times Limited 2021
